Not sure where to post this but......

[Melyni]

What do you guys think of this?
* SB967

SENATE BILL NO. 967
Offered January 14, 2009
Prefiled January 12, 2009
A BILL to amend the Code of Virginia by adding in Title 3.2 a chapter numbered 61.1, consisting of sections numbered 3.2-6110 through 3.2-6114, relating to the sale of horses by dealers; penalty.
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Patron-- Blevins
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Referred to Committee on Agriculture, Conservation and Natural Resources
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Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia is amended by adding in Title 3.2 a chapter numbered 61.1, consisting of sections numbered 3.2-6110 through 3.2-6114, as follows:
CHAPTER 61.1.
EQUINE SALES BY DEALERS.

3.2-6110. Definitions.

As used in this chapter, unless the context requires a different meaning:

"Dual agent" means a person acting as a representative for both the buyer and the seller in any sale of an equine. Auction companies shall not be considered dual agents.

"Equine" means a horse of any breed used for racing or showing, including prospective racehorses, breeding prospects, stallions, stallion seasons, broodmares, yearlings, or weanlings, or any interest therein.

3.2-6111. Written bill of sale required.

A. Any sale of an equine greater than $10,000 shall be accompanied by a written bill of sale or acknowledgment of purchase and security agreement that includes the purchase price and that is signed by both the purchaser and the seller or their agent or, in a transaction solely relating to a season or fractional interest in the stallion, the syndicate manager or stallion manager.

B. If the equine is sold at public auction, the requirements of this section may also be satisfied by the issuance of an auction receipt generated by the auction house, and signed by the purchaser or his agent. An agent who signs an auction receipt on behalf of the principal shall do so only if authorized in writing. When presented with such authorization, all other parties to the transaction may presume that an agent signing on behalf of the principal is authorized to act for the principal. For transactions at public auction, this section shall not require disclosure of the reserves, the identity of the principals, or the auctioneer's commissions.

3.2-6112. Dual agency; consent required; agency; consignor; disclosure of compensation.

A. Any person acting as a dual agent in any sale of an equine shall acquire the prior written consent of both the buyer and the seller.

B. Any person acting as a dual agent, consignor, or agent for either a purchaser or a seller in a transaction involving the sale of an equine who may receive compensation, in any form, greater than $500 shall disclose the payment in writing to both the purchaser and seller; and acquire the written consent for such compensation from each principal for whom the agent is acting.

C. Any person acting as a dual agent, consignor, or agent for either a purchaser or a seller in a transaction involving the sale of an equine shall, upon request by the principal, furnish copies of all financial records and documents in the possession or control of the agent pertaining to the transaction with the principal. Financial records shall not include: (i) the agent's or owner's work product used to internally evaluate the equine or (ii) veterinary records.

3.2-6113. Civil action for violation of chapter.

A. Any person who violates this chapter shall be civilly liable for damages in treble the amount of the damages sustained by the complaining party. The prevailing party in any litigation under this section shall be entitled to an award of costs of the suit, reasonable litigation expenses, and attorney fees. As used in this section, treble damages shall equal three times the sum of: (i) the difference, if any, between the price paid for the equine and the actual value of the equine at the time of sale and (ii) any compensation received in violation of subsection B of 3.2-6206. No person shall be held liable under this section unless that person has actual knowledge of the conduct constituting a violation of this section.

B. No contract or agreement for payment of a commission, fee, gratuity, or any other form of compensation in connection with any sale of an equine shall be enforceable by way of a civil action or defense unless: (i) the contract or agreement is in writing and is signed by the party against whom enforcement is sought and (ii) the recipient of the compensation provides a written bill of sale for the transaction.

3.2-6114. Penalty.

Any person who knowingly commits a violation of the provisions of this chapter is guilty of a Class 1 misdemeanor.

Our local H/J sharks..... er sorry trainers are all up in arms that they are going to have to go legit.

Yours
MW

[00Jumper]

I'm not an agent or a trainer but I have to say, I'm likin' it. :D I've been on the buyer end of a deal where the trainer liked to skim a lot off the top of sales, jacking up the horse's price to the buyer so they could grab a higher commission. It should be regulated, I agree.

The bill of sale thing doesn't bother me, we've done it with all of our horses. Doesn't the USEF require it anyway?

Good stuff, in any case. I'd love to see it spread to PA. I can imagine a few trainers' reactions to it already. :winkgrin:

[equinelaw]

I blogged on it last week. Maybe the week before. There is a comments section and the sponsor of the bill is reading my blog.

My blog entry is titled "Are you for fraud or Against it"?

The bill is several years very hard work by our own RNB.:)

Anyone who wants a similar bill in their state can ask her how it get it started. I am sure she has lots of spare time:eek::lol::lol: Its in the works in MD too.

[Melyni]

I blogged on it last week. Maybe the week before. There is a comments section and the sponsor of the bill is reading my blog.

My blog entry is titled "Are you for fraud or Against it"?

The bill is several years very hard work by our own RNB.:)

Anyone who wants a similar bill in their state can ask her how it get it started. I am sure she has lots of spare time:eek::lol::lol: Its in the works in MD too.

But what amazed me is that I was sent a "sign this petition" email by one of the agents who was outraged that they dared to do this and make her have to sign stupid bits of paper etc.

as she asked I contacted my delegate and representative and asked them to support this bill as it goes through the legislature, we NEED the cold light of day onto some of these murky deals.

I regularly sell young horses into the H/J world, and I have at last found an honest trainer/agent, but l was ripped off several times before I found him.

So as a seller of horses I applaud this bill.

What amazes me is that it is one of the agents who ripped me off who sent me that email alerting me to the bill.
What does she think, that I am happy about her 'methods of doing business", I didn't sue her before because as you said spending $30k to get back $20k was not worthwhile, but I have not forgotten it.

Some of these crooks (and yes that is what they are), are unbelievably brazen about it. They think it's their right to cheat their clients of thousands of dollars on the sale prices of horses just because they have gotten away with it in the past.


What will be most interesting is whether this bill will actually get enforced, eg will anyone sue anyone for this.
We shall see.
MW

[equinelaw]

VA has a lot of excellent lawyers. If they didn't have to spend so much time explaining to people that its just too expensive to make things right, I think more people could go ahead and use the court system as it was meant to be used. The bill includes attorneys fees if you win. That means fewer people will be locked out of court.

Agents are not having to give up fees, they are just having to tell clients about them. Agents do not have to give up anything but dishonest and illegal practices.

There has been quite a bit of social pressure within VA to fight the bill. Even threats like "if you do not stop promoting this bill you'll never pin in a class in VA again to you will never sell a horse in VA again!"

In fact, my blog entry is sort of a montage of things honest trainers have said but are too scared to publicly say. Even the title is a quote from a very well known trainer who would never say it in public or to a politician for fear of retribution. Hence my rant about "Not going to be scared off" of saying what I said. Like I have the damn sense to be scared off anyway:)

[RNB]

Melyni....First let me say 'thank-you' for your support. You may or may not know that this is my bill. It was introduced in the Senate last year and is sponsored by Senator Blevins again this year.

I just returned from Richmond yesterday evening. The bill was suppose to be heard yesterday in front of the Ag. Committee but was sent over to the Courts Committee at the last minute. It is my understanding it will be heard one day this week. Also, there have been a few small changes in the verbiage of the bill and I'm not sure it has been updated of the General Assembly website. I'll have to check on it this morning.

This has been quite an eye-opening and interesting experience....something that every honest horse owner in VA should know about. Once the session is over I do plan to share this situation with my fellow COTHers.....from my perspective, of course.

Again, many thanks for your words of support!!

Debbie Hanson

[ArtilleryHill]

This is very similar to legislation first enacted in California and Kentucky, where numerous bloodstock agents and consignors in the Thoroughbred business objected pretty mightily, as you might imagine, given the scale of some of the kickbacks you find in that game. But the law is generally regarded now as a good thing and protective of buyers without being punitive to the sellers. Now that it's the law in Kentucky, it's been interesting to see how quickly agents who objected the loudest are now saying how supportive they are!

[ArtilleryHill]

RNB, when you get more information on any hearings and/or votes, will you let us all know?

[Melyni]

This is very similar to legislation first enacted in California and Kentucky, where numerous bloodstock agents and consignors in the Thoroughbred business objected pretty mightily, as you might imagine, given the scale of some of the kickbacks you find in that game. But the law is generally regarded now as a good thing and protective of buyers without being punitive to the sellers. Now that it's the law in Kentucky, it's been interesting to see how quickly agents who objected the loudest are now saying how supportive they are!

Was anyone ever sued under the bill in CA or KY?
Or did it just straighten things right out without it having to be enforced?
Yours
MW

[Melyni]

Melyni....First let me say 'thank-you' for your support. You may or may not know that this is my bill. It was introduced in the Senate last year and is sponsored by Senator Blevins again this year.

I just returned from Richmond yesterday evening. The bill was suppose to be heard yesterday in front of the Ag. Committee but was sent over to the Courts Committee at the last minute. It is my understanding it will be heard one day this week. Also, there have been a few small changes in the verbiage of the bill and I'm not sure it has been updated of the General Assembly website. I'll have to check on it this morning.

This has been quite an eye-opening and interesting experience....something that every honest horse owner in VA should know about. Once the session is over I do plan to share this situation with my fellow COTHers.....from my perspective, of course.

Again, many thanks for your words of support!!

Debbie Hanson

Please do let us know. The bill is a breath of fresh air, and I did write and say that!

I think it's about time we had some transparency in this business.
MW

[pAin't_Misbehavin']

If I were ever foolish enough to represent both parties in a civil action, I'd have to make a full disclosure in writing and get the written consent of both parties. And of course both parties would know my fees, because I can't represent someone without a signed written fee agreement.

That's how professionals do things. I think it's a fine idea to treat agents as professionals.:yes:

[equinelaw]

And if we associate with another lawyer we only get paid for the actual part of the work we did. While my time is worth money, I do not get to be paid part of the legal fees if all I did was connect plaintiff with lawyer who ends up representing them.

I am all for trainers and agents making all the money they can. . I just think they have to tell people who is making what and why. The ability to pick up the phone and get a horse sold is worth $$$$$$. Anyone with good horses and no clients knows that, but put a price in it and tell the person what the price is. Transparency. That's all the people seem to want.

[ArtilleryHill]

In response to Equinelaw's query, the law in Kentucky is very new, and as far as I am aware there haven't been any cases yet, but I could be wrong on that. But the impetus for it was Jess Jackson, who did sue a group of agents in California, where the courts ruled they had no jurisdiction because (if I remember correctly) the transactions did not actually take place there. He then sued under existing fraud laws in Kentucky and subsequently lobbied successfully for the new legislation, which refers specifically to horse deals. RNB worked with Jackson's team, I believe, to push for the legislation's passage in Kentucky--is that right, RNB?

Jackson's main suit against his agents--these were transactions in the Thoroughbred business--has been settled. But another one, involving his purchase of the former Buckram Oak property in Lexington, is still in the court system, I think.

[cloudyandcallie]

I think the President should push a similar bill thru the congress for all the states.
We have the U.C.C. nationally for businesses, the compacts for child support and extradition, so why can't we have a national "Equine Uniform Commercial Code" for horses?

Good work Debbie!

[pAin't_Misbehavin']

We have the U.C.C. nationally for businesses, the compacts for child support and extradition, so why can't we have a national "Equine Uniform Commercial Code" for horses?

I was always taught that horses are goods as defined in the UCC. But as far as I remember (I'm sooo not a transactional lawyer:) ), the UCC is silent on the subject of dual agency.

[equinelaw]

I was always taught that horses are goods as defined in the UCC. But as far as I remember (I'm sooo not a transactional lawyer:) ), the UCC is silent on the subject of dual agency.

The UCC does cover horses is you are a merchant (dealer) but good luck trying to get a judge to understand that. Part of the need for the bill is so the judges have a code to look at that shows them the laws apply to horses too. There are already laws on agency too, but who can afford to sue these days but people like Jess Jackson?

[Melyni]

And if we associate with another lawyer we only get paid for the actual part of the work we did. While my time is worth money, I do not get to be paid part of the legal fees if all I did was connect plaintiff with lawyer who ends up representing them.

I am all for trainers and agents making all the money they can. . I just think they have to tell people who is making what and why. The ability to pick up the phone and get a horse sold is worth $$$$$$. Anyone with good horses and no clients knows that, but put a price in it and tell the person what the price is. Transparency. That's all the people seem to want.

Apparently it's the transparency that appears to be the problem. Like you I agree an agent/trainer should be paid fairly for the work they do. The ability to sell a horse is worth some money. But it seems that some trainers don't like their clients to know how much they make on a horse deal, and that's where it get murky and needs the weight of the law to keep it open and above board.

I think that everyone who sells a horse through an agent should feel secure that the deal the agent put together was the best possible deal and that they have been fairly represented, and its the lack of that feeling, that has led to this bill.

My own trainer, when I asked him, said No problem, happy to write out the bill of sale with all monies declared. So it isn't all trainers who object, it's just the few who don't want their transactions open to the light of day!

MW

[RNB]

Melyni....sounds as though you have a wonderful honest trainer and you are absolutely correct, there are many terrific trainers and agents within the industry. Sadly because of the amount of money changing hands it also attracts the dishonest ones.

I do not know if there have been any law suits in KY, FL or CA. However, I do believe if there had been a huge number we would have heard about it here on COTH. We don't miss much. :) I have been told there have not been any challenges to the laws in those states.

ArtilleryHill.....Yes, you are correct on all counts. The Jackson group in KY has been wonderful to work with...as was the Mack group in FL.

equinelaw and pAin't_Misbehavin'.....you hit the nails on the head. The UCC is referred to quite often but honestly most judges don't know a thing about the horse industry or how to deal with issues presented before them...nor does law enforcement for that matter. All you have to do is look back at all the threads on our own bb where horse folks turn to COTH looking for help because they feel they have nowhere else to turn. I believe we have helped many of them and we continue to educate the ten's of thousand who view the bb every day.

Thanks cloudyandcallie!

Update - the bill will be heard before the Senate Courts of Justice Sub-Committee on Thursday at 7:30 a.m. in Senate Room A. So if you're in the neighborhood please stop by!

[TWF]

Melyni... thanks for this discussion. I'm very grateful for your insights. In my experience... the courts and most lawyers have no clear understanding of how to "handle" horse issues. It is hard to fairly equate a 1200 pound living horse in the same "UCC category" as a dishwasher!

As I see it, the problem is a "conflict of interest and fraud" don't get much respect in some circles of the horse world. No one is the wiser in most cases and IF someone figures out they have been a victim of fraud...just were does one go with THAT complaint? Nowhere! Typically,the police just say it is civil. You then weigh your next move based on the dollars it will take to litigate the case vs the loss you may take on the horse IF you get to court....the judges go back to settling the case with the UCC - HORSE or DISHWASHER?

How many equine related civil cases exist? I am told no one knows! Without statistics...successful cases are dismissed as largely anecdotal. It's a classic Catch-22...if we don't report IT - IT doesn't exist! Evidently, polling the public about liability and legal actions is nearly impossible. That proves nothing but makes this issue difficult to quantify. The bottom line is.....Growth is good for everyone. For the horse industry to expand...transparency and 21st Century business practices are vital to attracting new investment. You can't expect new money to blindly invest. Clearly defining sales pracitces is just GOOD BUSINESS.

FYI...There has been not challenge to the law in Kentucky to date. I think that is pretty telling of a good law in one of our largest commercial equine states.

I am planning to make the trip to Richmond again. Please read the Bill carefully before forming an opinion....if you can make the trip... I'm sure the Senators will find the room!

[cloudyandcallie]

RNB says the hearing is Thursday at 7:30am before the Courts of Justice committee. It's early and the weather is cold, but if you sell horses thru an agent, you should go and if you are allowed to speak up, do so with your experiences.

Judges hardly ever refer to the UCC when horses are involved. They think it is only for "goods" and totally ignore horses traded interstate in commerce.
So everyone should watch Debbie's bill carefully, and if it passes, then see what develops in disputes over horse sales.

So please go to the hearing if you can and be careful driving there in the bad weather.

[Baroquecoco]

oh I love this!!!!! we breed and sell our own sport horses. I have now had a couple times where I work with a buyer for weeks. then at the very end of the sale process the buyer's trainer rides along and has their hand out. the buyer has no clue that their trainer is looking for a commission or does not believe the trainer is asking for as much as they are...so I love this!!!!! one time I had to explain to the buyer that I could not sell them a filly at the agreed upon price because their trainer wanted 20 per cent. their trainer had never been out with the buyer the several times they came to look at the filly. the trainer came by our farm without the buyer and demanded 20 per cent. then when I told the buyer it was a no sale the trainer clainmed that I had misunderstood. huh????btw, we are usually selling babies or youngstock under 2 so the trainer is pretty much doing nothing. I seldom have had a trainer bring me a buyer. when they do I am happy to pay them. and yes the h/j trainers have been the worst which is why we do not produce for or market to that market at all. glad you started this thread.

[lonewolf]

Hope this goes through.

When I told a trainer once that when I sold my horse I wanted a bill of sale signed by both myself and the buyer, they replied,

"Well, you'll never get any trainers to deal with you in the horse business."

I mean, come on.

[ASB Stars]

I think it is a fabulous concept- if they can pass it, and enforce it.

I work in Real Estate, for a builder. When an agent comes across the threshold, with a buyer, by virtue of the agency rules, if they are expecting to be an agent for the buyer, that relationship needs to be established PRIOR to their visit. In writing. No writing, no relationship as a Buyer's agent.

I cannot count the number of times I have had Realtors expect to represent a buyer with NO contract. The buyer sure as hell expects them to represent their interest. The reality is that the Realtor just wants the deal, a check, and buh-bye, in most cases. Oh, and can you send me referrals???

Don't get me wrong, there are a handful of good guys out there, doing it according to Hoyle.

With horses, I have to say that I have found the behaviour of many trainers to be reprehensible. ESPECIALLY with regard to commissions. Case in point- I had a gelding for sale, years ago, for $3500. Trainer calls, asks what I've got, and I tell her. He isn't fancy, but he'll pack in the hunt field, and he is a solid citizen. She says "Great- I'm bringing over a buyer- tell them he is $6500." I tell her he is not a $6500 horse. She doesn't care.

So, she wants ME to pay her for HER representing to HER buyer that the horse is 3K more than I want- put the difference in her pocket, if the deal goes....

I told her she needed to look for another horse. She is still a proffesional in this area. I am not. :lol:

Let's try some rules. And let's enforce them.

[cloudyandcallie]

OK everyone check with RNB and see if I got it right, tomorrow, 7:30am and everyone can support the bill.

[Melyni]

well I'm going! I feel I need to support this, so I ma driving to Richmond tomorrow 5:30 am!!

See you there.
MW

[cloudyandcallie]

Any word? How did Debbie do? Did y'all get to speak up in support of the legislation? Did anyone named Keg or anything like that go to object to the legislation?:lol:

[cloudyandcallie]

Debbie, you did a great job and worked hard and you should be lauded for your efforts. I hope that this setback won't discourage everyone for lobbying for and working for the passage of this bill.

And thanks to TWF and all the others who helped you also. Keep plugging along and eventually the legislature will do what's right.

[RNB]

Thanks cloudyandcallie!!! I was too exhausted to even post yesterday when I got home. Just to update everyone.....when the Senate Courts committee took a vote, it was a tie. When there is a tie, a bill is dead. Even though we lost a battle yesterday it doesn't mean we lost the war. And yes, I will keep "plugging along" and continue to speak out for protection of the average horse owner and expose the continued illegal secret profit making within the business.

I would like to thank our very own COTHer's TWF and Melyni for getting up in the wee hours of the morning, driving to Richmond and speaking before the committee. We greatly appreciate your efforts and applaud you for doing so. I hope you enjoyed witnessing just how the legislative process works. It was quite interesting, was it not?? ;) Melyni, I hope I filled you up with enough coffee and that your drive home was a safe one.

Even though we had a disappointing morning, TWF and I had a terrific afternoon. We spoke at length with a lobbyist who provided us with a lot of valuable information. We then stopped by the US Attorney's office a couple of blocks away and had a wonderful chat for almost and hour and a half with the US Attorney and Victim/Witness Specialist for the Dept of Justice. They had been following the bill from the very beginning and asked me to please stop by yesterday if I had time. Wonderful, wonderful folks!

I would like to thank each and every one of you who supported the bill and for all the kind words of encouragement!! It is greatly appreciated....more than you can imagine!!! COTHer's are the best!!!

[JSwan]

I was always taught that horses are goods as defined in the UCC. But as far as I remember (I'm sooo not a transactional lawyer:) ), the UCC is silent on the subject of dual agency.


They are. Horse sales are covered under the UCC. This includes express or implied warranty, fitness for a particular purpose, and can be used to argue that a trainer has a fiduciary duty to his client due to the unique relationship that exists between a trainer and client.

In this state, it is also a crime to misrepresent the condition of an animal at the time of sale.

When folks get cheated on a horse sale (in this state) and think they have no recourse, that is not accurate. The best bet is to find an ag lawyer or one who specializes in equine law. But an ag lawyer will do just fine.

(Not referring to your circumstances, RNB, or to the Bill your senator patroned. Just responding to this particular post. I was disappointed with the outcome of the Bill; I thought it would be better received this session.)

On dual agency I don't remember at all.

I dislike dual agency in general but it's permitted in Virginia so that's that.

[equinelaw]

The cost of litigation is prohibitive and the judges are not clearly comprehending the UCC+horses.

The bill included attorneys fees so that not only was the remedy clear, but it was also realistic. You do not get into and out of a suit over this type of thing in VA for less then about $40K. I many situations another $40K is just not available.

In the few cases I am personally familiar with the judges got it wrong. It was so clearly and obviously wrong no appeal was needed. They changed their rulings upon a motion for reconsideration. And having to ask for reconsideration is a horrible experience, but having it work tells you there is a problem.

Article 2 does have some rules for agency in how and if contracts are formed. The other rules on agency are plainly stated and pretty clear. However, it does no good unless you have 10s of thousands of $$ to throw at a case to get what you are legally entitled to. And several years.

The bill got 3 votes. It only needs 1 more. RNB will get that extra vote next time. However, even people in VA who are solidly for the bill and concerned about dual agency and known to be politically active are not really telling the leaders what they want. I find that confusing.

[JSwan]

I got out of it for less than 5K. You think RNB is the only one cheated in a horse deal on this BB? :lol:(It settled)

I've no doubt the dual agency bill will be passed eventually. I agree with you that people are not telling their legislators what they want. I've found that there is a small vocal minority of people who are active, and the rest don't care or assume someone else will do what needs to be done.

I figure that if folks don't get involved, they are NOT allowed to bitch and moan later. :)

Good luck, RNB.

The cost of litigation is prohibitive and the judges are not clearly comprehending the UCC+horses.

The bill included attorneys fees so that not only was the remedy clear, but it was also realistic. You do not get into and out of a suit over this type of thing in VA for less then about $40K. I many situations another $40K is just not available.

In the few cases I am personally familiar with the judges got it wrong. It was so clearly and obviously wrong no appeal was needed. They changed their rulings upon a motion for reconsideration. And having to ask for reconsideration is a horrible experience, but having it work tells you there is a problem.


The bill got 3 votes. It only needs 1 more. RNB will get that extra vote next time. However, even people in VA who are solidly for the bill and concerned about dual agency and known to be politically active are not really telling the leaders what they want. I find that confusing.

[Melyni]

I got an email this morning SB967 is now being reexamined by the committee.
So it appears that all is not lost yet.

I sent out a mass email to every Virginian horse person I know asking them to read and comment on the bill.
That way at least the Senators will know that horse people are concernd and want some kind of awareness and debate on the issue.

Let see what happens this time.
MW

[equinelaw]

Heck, just send them this thread:)

That's great news. :D

[cloudyandcallie]

Heck, just send them this thread:)

That's great news. :D


Go Debbie! If a lot of people show up at the committee meeting (when is it?) that 4th vote might get it onto the floor for a vote.